Gauhati HC: Resolve issues due to interim restoration of cancelled GST registration

The Gauhati High Court ordered a timely determination of the issue about restoring the GST registration. The taxpayer was severely disadvantaged for a long time due to the hearing of the petition being deferred. In turn, it directed that the GST portal should allow the taxpayer or the petitioner to file subsequent GST returns and pay tax dues to date.

The court passed the order in M/s Ramky TK JV versus the Union of India and four others. The order was passed on 18th August 2021 by Honourable Justice Achintya Malla Bujor Barua on the writ petition of the taxpayer, numbered 3852/2021.

M/s Ramky TK JV had made a mistake while entering figures in the GST returns of January 2018. It happened while they were filing the GST returns on the GST portal. Due to this error, they could not pay tax dues on the value declared and thus were unable to make an assessment. 

Consequently, events followed, and the GST registration of the taxpayer was cancelled in November 2019 through an assessing officer’s order. The GST law requires the taxpayer’s GST registration to be cancelled for non-filing of GSTR-3B for two consecutive tax periods. 

Soon after this, the person initiated a writ petition number 3767/2020 and got the cancellation stayed through the court’s interim order. It was stated that the specific writ petition was still pending and that no further progress was made after that.

Under the current writ petition number 3852/2021, the taxpayer has expressed the SGST authorities were yet to reinstate the cancelled GSTIN. It occurred despite the interim order restoring the cancelled GST registration. It resulted in the taxpayer being unable to file the pending GST returns and pay taxes for subsequent tax periods. The GST law allows taxpayers to file returns through the GST portal alone. However, the facilitation centres do not cater to manual submissions of returns and forms, except those notified by the Act and rules.

The GST portal is configured so that any interim court orders for restoration of cancelled GSTIN will not be identified and accepted. Therefore, the Gauhati High Court ruled that writ petition number 3767/2020 must get a quick closure. An early determination of the issues in such a petition should be made either for or against the taxpayer petitioner.

In the meantime, the current petition also had issues that taxpayers brought up that needed attention and resolution. The GST assessing officer slapped two notices on the taxpayer on 20th and 28th July 2021. The notices pertained to Sections 67 and 70 of the CGST Act, calling for an inspection, search and seizure, and taxpayers must provide information. These provisions get attracted if the GST assessing officers believe that the taxpayers are suppressing any supply transactions to lower tax liability or excess input tax credit claims.

The taxpayer was in a genuinely helpless position where they could not file the GST returns. The reasons were on account of the technical gaps of the GST portal concerning the interim order of restoring cancelled GSTIN. Further, they were ready to pay all tax dues for tax periods after January 2018, provided they could file on the GST portal.

Accordingly, the court held that the GST notices passed subsequently for non-payment of tax dues or non-filing GST returns have to be part of the same petition. Further, the previous petition 3767/2020 was merged with the current petition 3852/2021. Hence, the court has given two weeks for the respondents to produce records and appear before the court, failing which the notices will no longer be valid.

From the above case law, it can be learnt that the accuracy of GST return filing is of utmost importance. Any erroneous submission of GST data can have repercussions on the compliance of subsequent tax periods as well. Nonetheless, revision of GST returns for any inadvertent errors in the need-of-the-hour. It has given rise to several litigations in the past and continues to haunt some taxpayers to date. Moreover, a dedicated team must function on the GST systems that cater to technical re-configurations for such exceptional cases. 

For any clarifications/feedback on the topic, please contact the writer at annapoorna.m@cleartax.in